The word 'ily', is the shortened version of 'I love you', and is often used in texts, instant messengers, and in comment boxes on personal webpages.
Ily is usually read/said as all one word rather than pronounced as single letters such as 'I-L-Y'.
It is usually recieved as an affectionate term used more to describe your admiration for someone, rather than actual love, although can mean different things in different situations.

A short term for, "I Love You", but they don't mean the same thing. ILY is often used when you're speaking to a friend. If you're actually in love with someone, take your damn time writing out the whole thing.

Friend 1: gah, gotta go.
Friend 2: ILY!
Friend 1: ily2.<33

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Boyfriend: I love you.
Girlfriend: ily.
Boyfriend: ..you can't even take the time to write out the extra 5 letters for me? wow, we're through